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TMI Blog2024 (4) TMI 886X X X X Extracts X X X X X X X X Extracts X X X X ..... stand how a loan amount can be a matter of escapement of income u/s 148 for the simple reason that loan amount is a capital receipt and the only liability cast upon the assessee is to discharge the onus cast upon it by the provisions of section 68 - We find that the conclusions of the AO are at best the reproduction of the conclusions in the investigations report and indeed it is a borrowed satisfaction . The impugned notice issued u/s 148 of the Act is bad in law and accordingly, we set-aside assessment order framed pursuant to the said notice is quashed. The appeal of the assessee is allowed. - Shri Narendra Kumar Billaiya, Hon'ble Accountant Member And Shri Sunil Kumar Singh, Hon'ble Judicial Member For the Assessee : Shri Vijay Mehta For the Department : Smt Mahita Nair ORDER PER NARENDRA KUMAR BILLAIYA (AM) 1. This appeal filed by the assessee is preferred against the order dated 23.10.2023 by National Faceless Appeal Centre, Delhi [hereinafter in short Ld. CIT(A) ] pertaining to A.Y. 2011-12. 2. The grievance of the assessee read as under: - 1. On the facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeals) erred in not accepting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or reopening the assessment read as under: - Sub.: providing of Reasons for reopening u/s 148 in your case. Ref: your letter dated 02/01/2018. Kindly refer to the above. Reasons for reopening u/s 148 for A.Y. 2011-12 is provided as under. In this case, information was on record through the Asst. DIT [Inv.], Unit-2(1), Kolkata, vide letter dated 28-02-2018 received on 19.03.2018 that Shri Manish Rajnarain Goswamy who is assessed in this charge has entered into a financial transaction during F.Y. 2010-11. As per letter of Asst. DIT [Inv.], Unit-2(1), Mumbai the Department has received information from credible source that Large value of cash was deposited into the several bank accounts maintained with ICICI bank following by immediate transfer to other bank accounts. 2.1. During the course of investigation, it is seen that there were several bank accounts maintained with ICICI bank in which high value of cash were deposited regularly [just below Rs. 10,00,000] followed by transfer to other bank accounts through RTGS/TRF. While Investigation, the Asstt. DIT also observed several additional bank accounts in different banks where large value of cash were also deposited regularly and fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med to be a case where income chargeable to tax has escaped assessment. 7. In this case more than four years has lapsed from the end of assessment year under consideration, hence necessary sanction to issue the notice under section 148 has been obtained separately from Pr. Commissioner of Income Tax as per the provisions of section 151 of the Act. 8. Notice u/s 148 was issued with prior approval of Pr. Commissioner of Income Tax-16, Mumbai. 9. The information which was received from ADIT (Investigation), Kolkata is placed at Page Nos. 11 to 18 of the Paper Book. We have carefully perused the said report of the investigation wing. We find that there is a reference of 18 parties having bank accounts in ICICI bank wherein substantial cash was found to be deposited. There is no mention of any transaction of the assessee. The report further says that the cash which was deposited by the 18 parties in their respective bank accounts with ICICI bank was transferred to five parties. We do not find any mention of the assessee in this list of five parties. Thereafter the report mentions the transfer of funds from the bank accounts of the five parties to the bank accounts of other parties again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'borrowed satisfaction'. The reasons fail to demonstrate the link between the tangible material and the formation of the reason to believe that income has escaped assessment. For the aforementioned reasons, the Court is satisfied that in the facts and circumstances of the case, no error has been committed by the ITAT in the impugned order in concluding that the initiation of the proceedings under Section 147/148 of the Act to reopen the assessments for the AYs in question does not satisfy the requirement of law. 12. The Hon ble Delhi High Court in another case of PCIT v. RMG [396 ITR 5] dealt with identical issue and held as under: - As in the above case, even in the present case, the Court is unable to discern the link between the tangible material and the formation of the reasons to believe that income had escaped assessment. In the present case too, the information received from the Investigation Wing cannot be said to be tangible material per se without a further inquiry being undertaken by the AO . 13. Incidentally it would be apt to refer to the enquiry made by the Assessing Officer after reopening the assessment in the light of the aforementioned observations of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of amount to me. Money was deposited from Korp Securities Limited against sale of securities, I enclose copies of the bank statement and letter dated 16th july, 2018 for your kind perusal. I object to the said reassessment since there does not appear to be any independent finding of escapement by your goodseif and there is merely a reliance on the directions of the Asst. DIT (Inv), Unit -2 (1), Kolkata. The law on reassessment is clear to the effect that an assessment can be reopened only if the Assessing Officer has reasons to believe that income of the assesses has escaped assessment. The formation of this belief is a jurisdictional condition and its absence can vitiate the re-assessment proceedings. without prejudice to above I further submit that case is reopened beyond the limitation period of four years I have disclosed all the facts while filing income tax return. 3. I object to the said reassessment proceedings and request you to kindly provide us with copy of all the evidences that is to used against me. Treat these as my objections to the reassessment and kindly deal with these before proceeding with the said assessment. 4. I also request you to give us opportunity to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered at this stage. 2.4 In respect of the bank statement and copy of letter from wheelers developers Pvt Limited, it is to submit that during the course of assessment proceedings, you will be afforded adequate opportunity to explain your case and the resultant order will be passed on an objective appraisal of the evidence available and details/evidences submitted thereon by you. 3. In view of the above discussion, objections raised by the assessee for reopening of the case u/s. 147 are hereby disposed of. You are accordingly required to submit details as per notice u/s. 143(2) 142(1) enclosed. 17. It can be seen from the above that the objections raised by the assessee has not been fully disposed by the Assessing Officer. The Hon ble Jurisdictional Bombay High Court in the case of KSS Petron Private Ltd. v. ACIT in Income Tax Appeal No. 224 of 2014 dated 03.10.2016, had an occasion to consider the following substantial question of law: - Whether on the facts and circumstances of the case and in law, the Tribunal was justified in restoring the issue to the Assessing Officer after having quashed/ set aside the order dated 14th December, 2009 passed by the Assessing Officer without ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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